Retail leaders to invest in more technology and improve employee benefits for 2022, as staff retention and customer experience become top priorities, research shows

Retail leaders’ top industry challenges have changed as they plan for 2022, with remaining competitive against eCommerce now seen as a key obstacle to navigate by over a third (37%) of retailers versus only 26% in 2021, according to market research by the leading global software provider for the retail and hospitality sectors, Fourth

The new research also shows hiring issues are still intensifying, as sourcing staff post-Brexit and ensuring staff have the correct visas and work permits have become bigger challenges for the industry, rising from 25% in 2021 to 37% in 2022. Keeping the shopfloor Covid-safe for staff and customers has also increased to the third most pressing industry-wide challenge, rising from 26% in 2021 to 35% in 2022. 

While the top two retail industry challenges from last year are no longer among the top three, the proportion of retail leaders seeing them as a challenge has increased. Attracting customers to physical shops was 29% and is now 31%, whilst unpredictable consumer demand was 27% and now sits at 32%.

Retail leaders’ top three industry challenges for 2021Retail leaders’ top three industry challenges for 2022
29% of retail leaders struggled with attracting customers to physical shops37% of retailers are worried about remaining competitive against eCommerce brands
27% of retailers were worried about unpredictable consumer demand37% of retail leaders are concerned about sourcing staff post-Brexit and ensuring staff have the correct visas and work permits
26% said remaining competitive against eCommerce brands was a top challenge35% state keeping the shopfloor Covid-safe for staff and customers as a key challenge

When it comes to top operational challenges for retailers, communicating consistently with all employees (35%), retaining the best employees by maximising staff engagement (34%), and attracting the right talent before competitors do (32%) rank highest on the agenda for 2022.

The research comes as part of Fourth’s latest whitepaper: Talent, convenience, and technology: The Retailer’s guide for 2022, which explores what consumers want from retail, what the current challenges facing the industry are, and what 2022 holds for the sector. The whitepaper is built on insights from two surveys: one of 2,021 UK consumers, and the second of 251 UK retail leaders.

Utilising tech solutions

With a number of personnel challenges, in particular, retail leaders are set to further lean on technology in 2022 to meet business goals and address their challenges. When thinking about what will change in their business in 2022, the top change cited was relying on and investing in more back-office operational technology to automate processes (34%). This coincides with retail leaders also expecting to add more employee benefits to contracts (34%), and to implement more in-store technology (e.g. self-checkouts) (31%), suggesting a need to keep existing staff happy to mitigate turnover while also implementing technology that can streamline efficiencies. The findings also show a shift in expected changes from 2021, where the top three changes were relying on and investing in more back-office operational technology to automate processes (37%), implementing more in-store technology (37%), and spending more time analysing data to identify efficiency savings (35%).

Exploring the back-office technology retailers think are the most important for their business in 2022, retail leaders still believe HR and workforce management technology (40%, up from 38% in 2021) will be most impactful. However, the second and third most important tech solutions have changed. They are now employee engagement/social collaboration technology (which was 25%, now 39%) and customer loyalty technology (up from 29% to 38%), suggesting staff and customer retention and engagement is a key focus for retail leaders this year.

Responding to this latest data, Sebastien Sepierre, managing director – EMEA, Fourth, said: “Retailers have done a lot of work during 2021 to analyse and recognise their business needs, with technology at the forefront of that to help optimise workforce management and engage staff in particular. We’re seeing an uptick in retailers seeking out this technology too coming into the new year, having recently partnered with the likes of Holland & Barrett and Theo Paphitis Retail Group across more than 1,000 locations. Talent attraction and retention is especially key to the industry right now, and it’s great to see retailers implementing tech-based solutions that will help improve this into 2022 and beyond.”